Explore what it takes to transform a business from
mediocre to excellent. Based on solid evidence and volumes of
data, the author of the book (Jim Collins) and his team discover
timeless principles on how good to great companies like
Abbott, Circuit City, Fannie Mae, Gillette, Kimberly-Clark,
Kroger, Nucor, Philip Morris, Pitney Bowes, Walgreens, and
Wells Fargo produced excellent sustained results and achieved
enduring greatness, evolving into companies that were in fact
‘Built to last’.
Collins’ team selected 2 sets of comparison companies:
on. Direct Comparisons: Companies in the same industry with the same resources and opportunities as the good-to-excellent group but did not show a jump in performance, which were: Upjohn, Silo, Great Western, Warner-Lambert, Scott Paper, A&P, Bethlehem Steel, R. J. Reynolds, Addressograph, Eckerd, and Bank of America.
B. Non-sustained comparisons: companies that made a short-term change from good to great but failed to stay on track, namely: Burroughs, Chrysler, Harris, Hasbro, Rubbermaid, and Teledyne
Wisdom in a Nutshell:
on. Ten of the eleven leaders or CEOs of good to great companies come from within. They were not outsiders hired to ‘save’ the company. They were people who worked for many years in the company or were members of the family that owns the company.
B. The strategy per se did not separate the good or large companies from the comparison groups.
Cons Good to great companies focus on what not to do and what not to do.
D. Technology has nothing to do with the transformation from good to great. It can help speed it up, but it is not the cause of it.
me. Mergers and acquisitions do not cause a transformation from good to great.
F. Good to great companies paid little attention to managing change or motivating people. Under the right conditions, these problems naturally go away.
gram. The good-to-great transformations didn’t need any new name, tagline, or launch schedule. The leap was in performance results, not in a revolutionary process.
H. Greatness is not a function of circumstances; it is clearly a matter of conscious choice.
I. Every company that went from good to great had “Level 5” leadership during the crucial transition years, where Level 1 is a highly capable individual, Level 2 is a Contributing Team Member, Level Level 3 is the Competent Manager, Level 4 is an Effective Leader, and Level 5 is the Executive who builds enduring greatness through a paradoxical mix of personal humility and professional will.
D. Level 5 leaders display convincing modesty, they are self-effacing and unobtrusive. By contrast, two-thirds of comparison companies had leaders with gargantuan personal egos that contributed to the company’s demise or continued mediocrity.
k. Level 5 leaders are driven by fanatics, infected with an incurable need to produce sustained results. They are determined to do whatever it takes to make the company great, no matter how big or difficult the decisions are.
I. One of the most damaging trends in recent history is the tendency (especially of boards) to select brilliant and famous leaders and weed out potential Level 5 leaders.
Sir. Potential level 5 leaders exist all around us, we just have to know what to look for.
no. The research team was not looking for Level 5 leadership, but the data was overwhelming and compelling. The Level 5 discovery is an empirical finding, not an ideological one.
and. Before answering the “what” questions of vision and strategy, first ask “who” are the right people for the team.
P. Comparison companies used layoffs far more than good-to-great companies. Although rigorous, good-to-great companies were never ruthless and did not rely on layoffs or restructuring to improve performance.
q. Good to great management teams are made up of people who vigorously debate for the best answers, yet rally behind decisions, regardless of parish interests.
A. There is no link between executive compensation and moving from good to great. The purpose of compensation is not to ‘motivate’ the right behaviors from the wrong people, but to get and keep the right people in the first place.
yes The old adage “People are your most important asset” is wrong. People are not your most important asset. The right people are.
t. Whether someone is the right person has more to do with character and innate abilities than with specific knowledge, skills, or experience.
your Hedgehog concept is a concept that arises from the deep understanding of the intersection of the following three circles:
1. What you can realistically be better in the world at, and what you can’t be better at in the world
2. What drives your economic engine
3. What you are deeply passionate about
v. Discover your core values and purpose beyond just making money and combine this with the dynamic of preserving core values – stimulating progress, as shown by, for example, Disney. They have evolved from making animated shorts to feature films, theme parks and cruises, but their core values of bringing happiness to young and old and not succumbing to cynicism remain strong.
w. Great enduring companies do not exist simply to provide returns to shareholders. In a really great company, profits and cash flow are absolutely essential to life, but they are not the very goal of life.
“IF YOU ARE DOING SOMETHING YOU DEEPLY CARE ABOUT AND IF YOU BELIEVE IN IT, IT’S IMPOSSIBLE TO IMAGINE NOT TRYING TO MAKE IT BIG.”
By: Regine P. Azurin and Yvette Pantilla
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